Wedge Holdings is moving to secure a ¥388mn loan to parent Showa Holdings with pledges over four subsidiary stakes after saying the money has never been repaid and immediate repayment is difficult given the parent's finances. The August 2024 credit line has a ¥450mn ceiling and carries 3 per cent interest. Wedge said negotiations on the loan terms are still continuing and no changes have been fixed.
That makes the disclosure more than an untidy related-party balance. Wedge said the facility was originally meant for short-term working capital, with a maximum lending period of three months, but has effectively become long-term and harder to unwind. Since late 2025 it says it has been asking Showa to apply repayment deadlines properly, reduce the debt relationship over time and present a repayment schedule. According to Wedge, Showa has repeatedly said it has no alternative funding source.
The collateral package Wedge is due to receive is hardly a clean cash substitute. The parent is pledging a 40.32 per cent stake in Asuka Foods with a stated collateral value of ¥71.9mn and a 54.49 per cent stake in Nihonbashi Honcho Kashidokoro valued at ¥30.9mn, both based on third-party share valuations and a 70 per cent haircut. Two other stakes, 90 per cent of Showa Rubber and 90 per cent of Lucent, are assigned a memorandum value of ¥1 each because of those companies' financial condition. Wedge said the pledge rights will be put in place once preparations are complete.
| Beneficiary | Pledged asset | Stake | Stated value | Basis |
|---|---|---|---|---|
| Wedge Holdings | Nihonbashi Honcho Kashidokoro shares | 54.49% | ¥30.9mn | Third-party valuation, 70% haircut |
| Wedge Holdings | Asuka Foods shares | 40.32% | ¥71.9mn | Third-party valuation, 70% haircut |
| Wedge Holdings | Showa Rubber shares | 90% | ¥1 | Memorandum value |
| Wedge Holdings | Lucent shares | 90% | ¥1 | Memorandum value |
| Nihonbashi Honcho Kashidokoro | Wedge Holdings shares | 25.48% | ¥257.7mn | June 24 closing price, 70% haircut |
The wider group exposure is larger still. As of June 24, Showa's combined borrowings from Wedge and Nihonbashi Honcho Kashidokoro stood at ¥1.23bn against total credit lines of ¥1.3bn, and Wedge says a further increase or contract renewal may soon be needed if the parent's funding needs continue. Separately, that subsidiary has lent ¥845.09mn to Showa and is due to receive a pledge over 10,826,100 Wedge shares, or 25.48 per cent, with a stated collateral value of ¥257.7mn. Wedge ties the move to a broader independence drive from its parent, noting June 22 management changes at both companies were meant to end overlapping representative-director roles. It also said its market capitalisation was ¥1.44bn on June 24, below the Tokyo Stock Exchange Growth market's ¥4bn standard, with the improvement period ending in September. Investors are left with a related-party puzzle: collateral has been promised, but the real test is how much value it offers if the parent still cannot repay.